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Senate Passes Sweeping Healthcare Reform and Cost Containment Bill

November 15, 2017

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Result of yearlong effort to address rising costs and consumer protections

Last week the Massachusetts Senate passed sweeping healthcare reform legislation S.2022, An Act Furthering Health Empowerment and Affordability by Leveraging Transformative Health Care. The HEALTH act, passed by a vote of 33-6, focuses on both short and long terms goals on how to fix our healthcare system to lower costs, improve outcomes, and maintain access. The legislation is the result of effort by a group of Senators, The Special Senate Committee on Health Care Cost Containment and Reform, addressing the healthcare system by analyzing the best practices in other states and engaging stakeholders in a series of meetings over the last year.

“Everyone deserves access to high quality health care at a fair price,” said Senator Karen E. Spilka (D-Ashland), Chair of the Senate Committee on Ways and Means. “Massachusetts has always been a leader when it comes to healthcare, and this legislation is the next step in our efforts to protect and empower consumers, encourage innovative healthcare and ensure access and affordability. Our goal is long-term cost savings for the state, without sacrificing our unwavering commitment to high quality coverage for all.”

Healthcare costs are continuing to strain the budgets of working families, businesses, municipal and state governments. The Senate has continued to push for reforms to the current system through diligent research, stakeholder engagement, and legislation. The working group of Senators, with the logistical support of the Milbank Memorial Fund, spent the last year meeting with officials from seven states, healthcare experts, and stakeholders to examine best practices while lowering costs and improving outcomes.

The bill implements more effective care delivery such as telemedicine and mobile integrated health, to reducing emergency room visits, to expanding provider versatility while also addressing price variation between larger hospitals and their smaller community hospital counterparts.

A recent study by the University of California Davis Health system estimates that “by using telemedicine for clinical appointments and consultations, its patients avoided travel distances that totaled more than 5 million miles. Those patients also saved nearly nine years of travel time and about $3 million in travel costs.”[1]

The bill aims to reduce hospital re-admissions and emergency department use through mobile integrated health and telemedicine as well as expanding access to behavioral health. The Massachusetts Health Policy Commission has estimated that 42 percent of all emergency department visits are avoidable.

The bill aims to tackle provider price variation, the variation between providers for similar procedures, by implementing a floor for providers while also setting a benchmark for hospital spending. If hospitals exceed the benchmark the state will implement fines or penalties on those institutions.

Post-acute care in an institutional setting and long term care and supports (LTSS) cost the state an estimated $4.7 billion in 2015, a major cost driver for MassHealth. The bill increases transition planning for patients into community settings and strengthening coordination between providers.

Pharmaceutical costs have been a driver of increased healthcare costs for a number of years. The Center for Health Information and Analysis (CHIA) reported a 6.4 percent growth in pharmaceutical spending in 2016. Drug costs are making families choose between filling prescriptions and paying for other essentials like housing and food. The bill implements greater oversight and transparency in drug costs and encourages Massachusetts to enter into bulk purchasing arrangements, including a multistate drug purchasing consortium like other states, to lower costs and protect consumers.

The legislation encompasses the whole system from Medicaid to the commercials market, addresses price variation, increases price transparency for consumers, leverages better federal funding opportunities, and expands scope of practice for many practitioners including dental therapists, optometrists, podiatrists, and nurse anesthetists.